Biden Allocates $15.5 Billion to Enhance Battery and Electric Vehicle Manufacturing
The United States Department of Energy (DOE) is earmarking $15.5 billion to accelerate the adoption of electric vehicles (EVs) and bolster domestic battery manufacturing.
This initiative, a key component of President Joe Biden's "Investing in America" agenda, primarily focuses on supporting automakers and their suppliers in retooling their facilities to produce a range of EVs, including electric, hybrid, and hydrogen fuel cell vehicles. Out of the total amount, $12 billion will be allocated, with $2 billion provided as grants and $10 billion as loans, directly aiding automotive manufacturing conversion projects for light-, medium-, and heavy-duty EVs.
The remaining $3.5 billion will be directed toward the expansion of domestic battery production for EVs and the nation's power grid. Additionally, this funding will be used to bolster the manufacturing of battery materials and components, which have traditionally been imported from other countries. Notably, this marks the DOE's second installment of funding dedicated to battery materials and manufacturing.
In recent years, several automakers and battery manufacturers have revealed plans to establish battery production facilities within the United States. This trend gained momentum during the COVID-19 pandemic when supply chains were disrupted, making it challenging to obtain crucial battery materials, most of which are sourced from China. The passage of the Inflation Reduction Act in August 2022 further boosted domestic manufacturing efforts, offering incentives to manufacturers. However, guidance from the Treasury Department is still needed for many aspects of the bill.
These federal investments in domestic EV and battery manufacturing align with the Biden administration's commitment to creating high-paying manufacturing jobs in the United States, with a particular focus on states like Georgia, North Carolina, and Tennessee.
Manufacturers seeking support can apply for grants through the DOE's Office of Manufacturing and Energy Supply Chains or explore preferable debt financing options through the DOE's Loan Program Office. Priority will be given to companies with facilities in communities boasting a history of automotive manufacturing and projects that commit to providing competitive wages for production workers while upholding collective bargaining agreements.
